Husband/Wife Home Ownership
I just found out tonight that my husband owes someone $4500 dollars by close of business tomorrow. The catch is he borrored $4500 dollars from an individual whom happens to be a mortgage broker and my husband used our home to secure the loan for $4500 dollars. I read the contract this evening that states the person whom he borrowed the money from has exclusive rights to take our home if the loan is not paid in full by close of business March 5, 2007. I had no idea that my husband had done this. My husband informed me this evening that we had to pay this individual $4500 dollars tomorrow or he would take our house. I am totally freaking out because I do not have $4500 dollars liquid cash to give to this guy. The other thing that I am totally freaking out about is the fact that I do not even own the home with my husband. I purchased the home with my mother a few years ago to protect myself. I was married when I purchased the home but my husband did not contribute to the purchase. My question is that just because I am married to this man and he used my home as Collateral for the loan am I responsible for the loan and could this individual take my home? I am thinking that the individual that he borrowed the money from could not take my home since my husband name is not on the deed or the mortgage and I did put my mothers name on the deed and second on the mortgage. I plan to talk to my attorney tomorrow morning, however that does not help the panic I feel right now. I would appreciate advice from anyone. Please excuse the poor grammer and spelling in this post. I am just so upset I can not think straight.
Re: Husband/Wife Home Ownership
so your house is not any way owned by your husband? How did he put the house up as collateral without ownership? I can't be legal otherwise you could put up anyone's house as collateral. I'm sure he's still obligated to pay the loan, but it doesn't seem like your problem.
Obviously I'm not an attorney, but there must be some kind of protection for you in this. I don't even see how it's legal to lose your house over a $4500 loan, even if you own it. Maybe try a legal forum if you want some answers tonight.
And what a fucker. is the attorney you are talking to tomorrow a divorce attorney? How could he make the loan in the first place without asking, and also spring it on you with so little notice? What does that say for how he respects you? I'd be livid!
Re: Husband/Wife Home Ownership
That's utterly ridiculous. I have no idea if he automatically has any rights to the house, but I would think not. What in the fucking hell was he thinking? No kidding you're upset.
It's going to be fine; you're talking to your attorney tomorrow and doing everything you can. No way is your home being taken away from you. Relax now.
Re: Husband/Wife Home Ownership
Quote:
I purchased the home with my mother a few years ago to protect myself. I was married when I purchased the home but my husband did not contribute to the purchase. My question is that just because I am married to this man and he used my home as Collateral for the loan am I responsible for the loan and could this individual take my home? I am thinking that the individual that he borrowed the money from could not take my home since my husband name is not on the deed or the mortgage and I did put my mothers name on the deed and second on the mortgage. I plan to talk to my attorney tomorrow morning, however that does not help the panic I feel right now.
This is messy business. One point of law holds that 'joint tenancy' creates property rights for your husband regardless of whose names do or do not appear on the title. Another point of law holds that any property acquired by one married partner after a marriage takes place creates property rights for the other partner irregardless of the actual amount of direct financial contribution by one marriage partner vs the other in acquiring the property. Thus the creditor's attorneys will undoubtedly argue that your husband had the right to pledge at least 1/4 of the assessed value of the house as collateral based on his 'joint tenancy' of your 50% ownership. If your husband has defaulted on his arrangements with this creditor, the creditor's attorneys will certainly argue that they have the right to seize the collateral that your husband pledged.
'Joint tenancy' rights ( or community property rights ) are an outgrowth of legal interpretations that, at the time of divorce, separated wives were entitled to 1/2 (or some 'equitable distribution') of the value of houses, investments, retirement funds etc. that their husband's job / income allowed them to accumulate while married etc. but which may have been solely listed in the husband's name or solely paid for by the husband's earnings. While this is an unintended consequence, you are now on the flip side of the husband = breadwinner, wife = dependent stereotype with the house being in your name and paid for with your money, but you will be subject to equal treatment under the law nonetheless. Otherwise the court would be allowing sexual discrimination to be taking place if it allowed you to keep the property that you paid for but did not also allow husbands to keep the property that they paid for rather than sharing the value with their divorced wives.
You and your mother will certainly have the option to pay this creditor $4500 in cash (plus interest) and avoid foreclosure. It then becomes a question of whether you want to have your attorney approach the creditor's attorney with some sort of postponed payment plan for the $4500 (plus interest), or whether you want to allow the creditor's attorney to begin foreclosure proceedings and then attempt to fight the foreclosure. Both will be expensive, but the former may minimize the damage to your credit rating as well as your mother's credit rating. The latter does offer some promise that the court will stay the foreclosure if you can't / won't pay the $4500, but it definitely will be a calculated risk and your husband's and therefore your own and your mother's credit ratings will be trashed in the process. Also, a lien will remain against the house as long as the $4500 remains unpaid - meaning that, even if the judge allows you to avoid foreclosure at this time, at the point when your mother dies and the house must be probated or you and your mother choose to sell the house this creditor IS going to get his $4500 (plus interest) before the title can be cleared.
Again, I am certainly no attorney, and I could very well be totally wrong about this situation under the laws of your particular state. It is possible that the attorney you are consulting with tomorrow knows of some different angle on this situation. Either way, please let us know what the attorney has to say !
Quote:
And what a fucker. is the attorney you are talking to tomorrow a divorce attorney? How could he make the loan in the first place without asking, and also spring it on you with so little notice? What does that say for how he respects you? I'd be livid!
Well, this is a whole 'nuther story. However, be aware that as part of any divorce settlement your husband will wind up being entitled to receive 1/2 (or some equitable distribution) of your 50% of the 'joint tenancy' ( or community property ) house ! Thus if divorce is in the offing, you may want to simply allow the creditor to foreclose, grab his $4,500 first, and then let your husband walk away with 25% of what remains while you and your mother get to keep 75%. If you settle the $4500 debt prior to divorce, you and your mother will not get 'credit' for the $4500 payment and your husband will wind up walking away with 25% of the house's full value. If you're talking about say a $60,000 house the difference would be 25% of (60k - 4.5k) = $13,875 versus 25% of the full $60k = $15,000 for your husband, and for you and your mother 75% of (60k-4.5k) = $41,625 versus 75% of the full $60k minus the $4,500 payment = $40,500. You would also save the legal fees involved in attempting to fight a foreclosure, which could then be applied to divorce proceedings instead. In fact, if you were 'clever' you could manage to suitcase part of the proceeds from the foreclosure ( like for example by voluntarily compensating your mother for the entire $30,000 she had invested, leaving only $12,750 as your husband's 'joint tenancy' share) such that your husband would actually receive much less than $13,875 during the separation / divorce settlement.
Also, allowing the foreclosure to take place as the result of your husband's secretive financial deal gone bad would also go a long way towards proving 'fault', probably resulting in a more 'equitable distribution' of other marital property such as cars, home furnishings, bank account balances etc. in your favor rather than a straight 50-50 split. If you're seriously considering divorce, this secretive financial deal gone bad is the ideal 'leverage' to allow you to walk away from divorce court with a halfway decent settlement in your favor.
I'm not trying to put ideas in your head, but my ex-husband the aspiring musician wound up raking me over the coals financially for years before I finally worked up the 'balls' to divorce him. All that I accomplished by waiting and trying to 'straighten him out' was more years worth of my income being spent on guitars and amplifiers and parties, and bigger joint credit card bills and other joint debts which I wound up having to cover 100% after the divorce. IMHO being dishonest about money / debts, and particularly being dishonest about LARGE debts that potentially affect other persons besides just the husband and wife, is a major breach.
~
Re: Husband/Wife Home Ownership
I think you would probably be able to contest this. This was a "personal" loan given by a private entity. Was this contract written up by hand or did a lawyer prepare this contract?
None-the-less, just because someone puts something in writing does not make it legal, nor does it make it enforceable. If this contract violates any of the federal, state, or local laws...it is unenforceable...no matter who signed the paper or whether it was signed in blood. Of course, talk with your attorney, but if your home is worth $300,000...no judge is going to allow some mortgage broker who lent your husband $4500 take full possession of your home. He MAY allow, however, the broker to slap a lien on your home so when you go to sell it (or refi) you would have to pay him off at the closing.
Sounds like an overly enthusiastic schmuck and a moron who made this deal. I cannot believe that you will allow your husband to get away with this kind of behavior!
One last comment...this broker cannot take your home if you have a mortgage. He would have to purchase the home (for the mortgaged amount) from the mortgage company. So, you would owe him $4500, but he would have to shell out the mortgaged amount to take full possession. I can almost guarantee that he is not getting your home...and especially not for $4500!!
Also, depending on which state you live in...if your husband is not on the deed/title, he has no legal rights to using the home as collateral.
What an interesting situation...please update us with what happens and with what your lawyer says.
Re: Husband/Wife Home Ownership
Thank you all so much for the advice. I think that I am going to be okay. I have an appointment with my attorney today at 3 PM to go over the details. My husband signed a contract with an individual to take the loan for $4500. The contract was not reviewed or signed by an attornery nor was it notorized. I don't think that I have anything to worry about, but when my husband showed me the contract last night and informed me that the money was due today by close of business I lost my rational thinking. My husband has (is) always been very irresponsible financially and I have provided for us over the past 7 years. When I purchased my home almost 4 years ago I put my mothers name on the mortgage and the deed to protect myself since I did not trust him even back then. I am so hurt that he would do something like this. I worked half my life to buy this house and provide a nice environment for myself and my four year old daughter. I am not quite sure how he even was able to use the house in this transaction since he is not a part of the ownership in any way shape or form.
On another note this just may be the icing on the cake for me. I have stayed with my husband this long because I wanted my daughter to have a two parent home. But now that he has done something so stupid that could have caused us to lose our home, I am thinking I might be better off alone.
I will keep you all updated.
Re: Husband/Wife Home Ownership
^^^ again, in the majority of states simply being married at the time the home was purchased, and living in the home together as 'joint tenants', confers partial ownership rights on the spouse even if they did not directly contribute financially to the purchase and even if their name does not appear on the title/deed.
Please keep us informed ... we're all very curious as to how this turns out for you.
Re: Husband/Wife Home Ownership
Quote:
Originally Posted by
CC_Mist
I have stayed with my husband this long because I wanted my daughter to have a two parent home. But now that he has done something so stupid that could have caused us to lose our home, I am thinking I might be better off alone.
There you go -- better to have a one parent home and actually have a house than to have two parents and no house!
Re: Husband/Wife Home Ownership
No “Mortgage Banker” is going to make a loan against property to which the borrower has no record title whatsoever.
Sounds like the “creditor” is some kind of loan shark/gambler/drug dealer. If he does not get the money, your divorce problem will be taken care of for you.
Re: Husband/Wife Home Ownership
Do you live in Wash D.C.? If so, its an "equitable distribution" state rather than a "community property" state. That may be helpful to you.
This loan sounds completely shady. Find out who this individual is first. If he's indeed a licensed mortgage broker, he can lose his license for for this kind of shit.
I would divorce that motherfucker so fast though. He WILL continue to do this type of thing and ruin your life. You don't deserve this.
Re: Husband/Wife Home Ownership
Re: Husband/Wife Home Ownership
I somehow highly doubt that one could create a mortgage that is enforceable against you without your knowledge as registered title holder in any reasonable jurisdiction, even if there is some sort of entitlement to matrimonial property for your (soon to be ex-?)husband. At worst, I can imagine a situation where a creditor could get a judgment against him, and enforce against what is (probably) his only asset: his matrimonial rights in the home. This would be an indirect process.
Whether this could be done against someone who isn't a title holder, but (probably) has matrimonial rights of some sort in the home is where you'll get major jurisdictional variability. Here (Ontario), he'd have a matrimonial right to part of the value (unless otherwise agreed to in a prenup), but this right would be personal and couldn't be exercised indirectly by creditors (this is one reason why it's so popular to put assets in a spouse's name to avoid creditors/bankruptcy). This would be further complicated by the fact that your mother owns parts, and I suspect that in any reasonable jurisdiction, her share would be out of it entirely even in terms of redistributable value under matrimonial entitlements: the rights of a joint tenant shouldn't be affected by the marriage of the other joint tenant to a third party. Basically, on liquidation (actual or paper-based for valuation purposes), the mortgage holder (the bank, not this crummy "creditor") will get first dibs, then there will be issues as to what share your mother really owns... arguments about her owning it in constructive trust for your, based on (say) your having made the mortgage payments might come out, as might arguments that you were "gifting" the mortgage payments to her in a creditor-reversible transaction (if that's allowable in your jurisdiction).
Your most likely source of pain is that which Melonie wrote about earlier, in terms of these matrimonial entitlements: in the divorce process, "your devoted homemaker husband, who stayed home to take care of the kids while you were working and enriching yourself" will see himself entitled to (depending on the jurisdiction) somewhere between half the value (minus what's owed to the bank and your mother's share) to half the increase in value from the time you got married. Most reasonable jurisdictions will lie somewhere between those two extremes, and you'll need local legal advice to figure it out. As an example, here in Ontario, without a prenup, the situation would massively change depending on whether the house was already owned at the time of the marriage, or bought after and whether or not it was actually lived in as a matrimonial home (an acquaintance avoided a massive split-up bill because the house was in renovation at the time of the break-up, and had never actually been lived in as a matrimonial home!). What I'm getting at is that you really need advice on this, from competent local counsel, as jurisdictional variations are extreme, and can badly mess you up unexpectedly. This seems like a much more likely problem than the "creditor" above-mentioned.
Re: Husband/Wife Home Ownership
^^^ almost entirely applicable to a DC divorce, other than ...
A. since they were already married at the time the home was purchased, the husband's attorney can definitely make the case that 50% of whatever money was put into the purchase by the wife was 'marital' property ... to which the husband has a vested right.
B. DC laws work on a principle of 'equitable distribution', as opposed to some US state laws that work on a 50-50% 'community property' split. Because of the secrecy and intrigue and the husband's irresponsibility re the secret and now defaulted loan, it is highly probable that a DC judge would grant significantly less than 50% of the wife's original contribution to the (ex) husband. However, in practical terms the (ex) husband IS going to get a sizeable chunk, perhaps 1/8th of the home's current value versus the 1/4 which would be the case if the judge decided on a 50-50 split of the wife's share of the purchase price.